jersey. stay away from cliffs. i thought i'd take a look just at the performance of the dow, the s&p and nasdaq so far this year with one more trading day left to go. the industrials still lagered there up 6.5%. the s&p 500 hanging on to a 12% gain. nasdaq is higher by most of them, up by 14.25%. may all your total returns be happy next year, michelle. >> you too, tyler. don't forget, 3:00 p.m. that's the big meeting at the white house where presumably maybe, possibly they might get something done? i've heard that before. >> we've heard that before. sounds like a mini deal. welcome to my father-in-law jim lemarca and the cast of his book, "bonus time." it's sort of like "zero dark 30" kind of sort of. >> that will do it for "power lunch." >> "street signs" begins right now.

there is a full cornucopia of cliffs on this fiscal friday. the president plans to pop another tax proposal on congress, but will it pass? the clack is ticking. latest ahead. so what would a cliff jump really mean for american business? you will hear directly as we reconvene our exclusive small biz all-star panel. plus, call it the retail hu "hunger games." three companies that may not survive. predictions 2013. big calls for the new year, mandy. bring it on. the s&p 500 is on track for a fifth straight decline. some of the hope does seem to be coming out of the market of late for a deal. of course, there could still be time. nonetheless, what we have seen is a drop of 1.3% so far this week. indead, the s&p's longest losing streak in three months. even the good news on home sales. not helping the three major

averages which are on pace for their biggest weekly drop in six weeks. keep in mind, many investors are still away for the holiday shortened week. volume is light. that does tend to exacerbate market swings. let's get down to the trading floor. all kinds of news and reaction to hopes for some kind of move. let's begin with mary thompson at the nyc. >> you're right. very right. very low volume at nysc. 1.2 billion. on average we see about 3.2 billion shares changing hands each day. again, volume well below the average that we see. not unexpected on the second to the last trading day even as we teeter on the fiscal cliff. the market trading in a tight range since the market closed. we've seen a little bit of an acceleration down. as has been the case for the past several sessions. what happens in the market hinges on what's happening in d.c. right now that's noga head of today's 3:00 p.m. meeting at the white house.

despite fears we're heading over the cliff, despite disappointing news on holiday sales, retailers are looking strong. they've just come off the highs of their session. getting a new boost along the east coast and gulf of mexico has been averted for another 30 days. also higher today, the u.s. currency. strength here weighing on dollar based commodities. energy and material shares among today's weakest performers and because of fears the demand could slow up for both of these groups if the u.s. goes over the fiscal cliff. again, we're waiting for any news coming out of the 3:00 p.m. news. >> send it over to bertha coombs. what have you got on your 3450i7bd? >> as mary said, a lot of people are sitting on the sidelines in terms of any movement in congress over the weekend. but we did get that delayed weekly inventory report, and that was fairly bearish for the most part. much smaller than expected draw down in crude. bills across the product. in crude the thing that people

watch is what happens to the nymex in curbing, oklahoma. there we saw a 2 million barrel increase in terms of stockpiles. we're now at a record 49 million barrel stockpile. that really just underscores what we've seen all year and why we've seen nymex crude underperform, brent, which is now considered really the global benchmark because we keep having strong production coming out of north dakota but no real way to get that production out of the hub in cushing, oklahoma, down to the refiners on the gulf coast. very little trickling down. a lot of it going by rail these days. we'll continue to see that until we get pipe lines. as far as metals are concerned, with the strength in the dollar we see them all down across the board today. back to you. bertha, thank you very much. we have the nyse. let's go to time square and the nasdaq with seema mody. >> very similar story. the composite pairing losses over the last two hours.

there is a rising speculation or hope if you want to call it that a mini deal will be put into place to avert the fiscal cliff. you can see the nasdaq down about 9 points or so. to get stock specific, facebook in the news. it was the worst performing stock on the nasdaq 100 this morning but rebounding over the last hour. a facebook spokesperson speaking out in response to a report that said instagram was seeing a decline in users. facebook writing that this data is inaccurate. we continue to see strong and steady growth in both registered and active users of instagram. interestingly enough, if you take a look at some of the best performing stocks on the nasdaq 100, facebook made that list but still down from its ipo that it made back in may. that's putting it into perspective. stockstill down 30% from its ipo. >> pick it up from there. seema, thank you very much. in the meantime, it is what everybody is talking about, the fiscal cliff deadline. in just one hour leaders from both sides of the aisle are scheduled for a sitdown and pow

wow with president obama. our eamon javers is there. can we expect the best? >> everybody is certainly talking about it but there are not a whole lot of people who know what will happen here. the sliver of hope is the consensus expectation in watching ton is that the president might lay down an offer for a small deal, some type of extension of the bush tax cut for those under 250 or maybe on up to $400,000 if that's where negotiations take him. and then throw in a bunch of other cats and dogs like, for example, an extension of unemployment insurance for those people whose unemployment insurance is going to run out. a couple of other items and call that a deal. that may be where we're headed here, but we simply don't noah head of this meeting, which is now just about 55 minutes away. meanwhile, here in washington at least one republican senator took the opportunity today to say all of this rests at the feet of the president. take a listen. >> we need two words,

presidential leadership on not just taxing rich people. we could tax all the rich people and cut their heads off and it wouldn't help the medicare fiscal cliff. we need to do both, and the president has to lead it. if he does, i'm ready to work with him and so are a lot of other republicans and democrats. >> so, mandy, a lot of different proposals floating around here in washington. a lot of ideas. a lot of attempts to read the minds of those key people in the room. >> eamon, is it true that some senators have left the boat and are fishing on their own for a deal? >> yeah. there are a couple of different proposals floating around out there now. you always have it in the senate, gangs of two, three, four, five senators put out their own ideas. at this late hour what the markets should focus on are the five leaders and the president that will be in that room. anything coming from any other senator is probably not fully baked enough to get through here at this point. it has to come from the

leadership. >> eamon, thank you very much. appreciate it. higher taxes is part of the cliff story. our next guest says there are other concerns that go along with it, credit and rating. andy brunner, head of international fixed income and craig gizmu expert strategist at vieng sparks ibg. andy, i would think if we went over the cliff long term, it would be good for the market in the long term. in the short term could it be disaster? >> i don't think it's disaster. i am looking for moody's and fitch to downgrade the u.s. government, possibly s&p one more notch. it's not going over the cliff but the government can't come up with a real decision. i do, by the way, think there will be some kind of agreement over the weekend as your previous reporter said. i think it will be a light weight deal. the biggest thing, brian, is we get to do this in another 60 to 90 days with the debt ceiling. we have a lot of problems and

issues but we can't seem to agree on much. >> craig, should we go over the fiscal cliff? >> well, brian, it's not an ideal situation. certainly i think if you could have both sides of the aisle rise above, as you guys have said, and come to some kind of a balanced deal, it would be great. given the alternatives right now, it's not that bad of a deal because if you look long term, the government spending has been about 20% of gdp. today that's 25%. revenues have been 18% of gdp. today that's 15.4%. it's both a spending issue and a revenue issue. so at least the cliff resolves the revenue issue. certainly it does it more than we needed it to. it also has to involve spending. at least we get the revenue side taken care of. >> it totally feels as if all of this discussion of taxes is a distraction to get away from the big issue of spending. andy i want to take you up on the issue of a credit rating downgrade.

we had that in 2011 in the summer from s&p. the markets didn't seem to care. would they care next year either? >> well, you know, i think you're absolutely right. markets initially care if s&p downgraded but then they came quickly back. one of the things you have to factor in is the federal reserve is buying every treasury you can think of. >> bingo. >> there isn't any flow. there's nothing to sell. i don't think that's a real good way with which to look at it. i think it's going to be a problem. maybe not initially but eventually by the middle of next year. >> they're more like the bond unix. >> that's a good point. brian, one of the things to point out. the optics. 3.6 trillion of spending against 2.3 trillion in revenue. that's an 8% budget deficit to gdp. we're in the same realm as spain. we're not -- we do not have good optics here. i think it's going to get worse before it gets better.

>> craig, you know, i understand that we need a real good kick in the pants, in the fiscal pants if you like, right, to get this house in order. at the same time, if we go over that cliff, this is real money to real people. this is money being taken out of people's paychecks. this is some people losing their unemployment benefits. all kinds of things could happen. how bad could it be? >> well, it certainly could be bad. just as an example of that, if you look at the payroll tax cut alo alone, that doesn't seem to be on the board. that could be an increase in the gasoline tax of $1.25 a gallon. there will be effects, but that has to happen at some point. we've been living on sugar high for too long now. at some point we have to get back to fiscal discipline. there's going to be some pain involved. >> craig, politicians don't get re-elected by not giving out candy. they get elected by giving out candy. >> i agree. i think that's why we need somebody to come along, a type for fiscal policy this year in the next coming years to make

the hard choices that aren't popular that will put us on a sustainable path going forward. >> craig and andy, thank you both very much. have a happy new year. >> you too. >> same to you. all of this what we learned from our past is what exactly? let us check in with rick santelli at the cme. before we get into that, you and i were going back and forth in e-mail about $250,000. what people don't seem to get is 250 under clinton is not 250 today. it will capture about twice as many taxpayers. you can't make the historical reference. >> no, you're exactly right. you know, when the government deals with their public pensions and their unions, do they ever forget to inflation adjust? of course not. but look at two times they failed to. when we hear going back to the clinton tax rate of 39.6 in '93. 250 grand threshold in today's

dollars will be about $165,000. a 35% miss. what's even worse is obviously you've herd it a million times, brian, and you've talked about it in the first person, that 250 grand isn't a million but it's become synonymous to this administration. in all these instances i cried pinocchio. it just isn't right. and i'm not saying i advocate higher taxes because whether it's the 2% or the 98, i don't think it benefits. but they are playing fast and loose with numbers and they know better. >> but that may be why the president is willing to deal with that $400,000 year figure we have floated, because 250,000 back in '93 when clinton raised rates is about $400,000. today it's almost a perfect historical backtrack to the clinton era. >> no, you're exactly right. i think whether it's 375, it's close enough. >> close enough. >> for argumentative purposes. i'm with ya. i guess the sad part is that we

have all these ivy league elite economists that are just everywhere in d.c. and yet not a whisper to the fact that we just discussed. they know, they just don't care to tell us. do they really think we're that stupid? >> no, it's just that ivy league schools are very expensive, you know, liberal cities. >> come on, what do you expect out of d.c.? they're going to tell us what we want to hear, not actually what the truth is. >> i don't think the house republicans are going to tell the president what he wants to hear. >> you tell him, rick. >> rick for president, i say. >> we'll see you soon, rick. thank you very much. all right. up next on "street signs", we've got some good news for you, america. we have averted a cliff, sadly not the big one. >> we'll take a little one anyway, brian. retail "hunger games." three big stores that you know, you may even love. will all three survive the new year? and you wouldn't have it any other way. but your erectile dysfunction - you know, that could be a question of blood flow. cialis tadalafil for daily use

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it looks like one of the cliffs, the container cliff, lass been averted, at least pushed back a bit. jackie deangel lis back in the newsroom. >> good morning, brian. the international long shoreman's association and the u.s. maritime alliance came to an agreement to extend their current contract by 30 days to avoid a walkout at 12:01 on sunday morning. the news came from the deputy director of media services. this 30-day extension will take the parties to midnight on january 28th, 2013.

the main issue was the container royalty payment issue. that is subject to an overall collective bargaining agreement. the negotiations scheduled for the next 30 days, they're going to be set by the federal mediation and conciliation service. at stake before the extension was granted was the retail supply chain that operates through more than a dozen ports from maine to texas. that includes the ports of new york and new jersey where we were earlier today. that port handles $208 billion in cargo last year. now in 2002 we saw west coast walkout. analysts estimate that the costs to the economy then was $1 billion a day. for now the retail industry is relieved. we're talking retail stocks rebounding later today. the container cliff has been averted but, again, we've just kicked the can down the road here because we have to address it at some point. >> that seems to be everyone's favorite thought, isn't it? kicking the can. cliff cornucopia continues

to spill over. you also have to worry about the milk cliff. yes, milk cliff in 1929 a farm law was passed that had washington buy milk at inflated prices. if there's not a move to get a new bill, we'll all pay the price. phil is joining us. how much could a gallon go up to? >> well, mandy, you're right. it could go up probably $3 a gallon. it's not just about a milk cliff. while everybody is talking about the fiscal cliff, there's a farm cliff. secretary vilsack has been calling on the industry, calling on the senate and congress for months to avoid this problem because if the farm bill expires, we've got some real issues. >> so what do you think we should do, phil? what's the solution? >> well, bottom line is we've got to get everybody in washington to wake up. the senate passed it. the house ag committee passed it, but, you know, the house has really not allowed the debate to

happen so as a result we've got all of this stuff happening and my fear is we're going to get lost. let's not forget, we've seen prices increase over the past two years dramatically, and especially after this summer's drought, prices went up even more. they're going to continue to go up. back in february the usga issued its 20-year report. it said because. global crisis, the prices are going to go up. we have this $5 billion over the past few years that's really set to expire. i frankly think that we are going to see some compromise probably similar to what we're going to see with the fiscal cliff where they're going to stave off everything for a few months. we can't let this happen. >> we can certainly hope so. without stating the obvious is it just milk or all dairy products like cheese, yogurt, other things? >> all of our foods. all of our grains. keep in mind the price of corn for cows for feed is up to about $300 a ton. that's three times what it was a

few years ago. so it's going to affect all of our food prices. so the bottom line is, you know, brian, you'd better buy some milk tonight and store it, freeze it, because you don't know what's going to happen. >> hoarders, extreme milk edition. i'm down with that. listen, charles crowdhammer, the columnist, phil, made an interesting point. he said, maybe we should go over the milk cliff because only when american voters go to the store and now see 7 or $8 gallons of milk will it really hit home to them how screwed up our archaic laws are and our subsidies are. >> i agree with that totally, however, here's the only thing that keeps me up at night when i think about that. you look at some of the research that's been done over the paths couple of years. in those cities where the price of low fat milk is less expensive than soda, low fat milk consumption is higher than soda. in those cities like new york where soda is less expensive than milk, guess what, soda consumption is up.

so also when we look at the whole obesity situation, we've got to drive down the price of milk and hopefully we'll consume less soda and less sugars. >> that would be healthier for all. thank you very much forex planing the situation to us. phil. just ahead on "street signs," why the cliff could actually speed up millionaires' debt. you're not going to believe that. >> you'll hear that. plus, predictions 2013. we will break down our big bets for the new year. we leave you no you with a shot from our white house stake out camera. house speaker john boehner, minority leader nancy pelosi, senate majority leader harry reid and mitch mcdonnell who have a collective 100 years legislating between them will be meeting with the president soon. . they have carb steady, with carbs that digest slowly to help minimize blood sugar spikes. [ male announcer ] glucerna hunger smart. a smart way to help manage hunger and diabetes.

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the military, veterans and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve. it is the hottest story online right now. it is sensitive but it goes something like this. are people more likely to pull the plug on rich relatives to avoid higher estate taxes? john is with us. john, you're not saying, i think, that people should accelerate the passing of their relatives -- >> no. >> -- or are you saying that? >> no. what we've seen in the past when

inheritance taxes have gone up in the united states and abroad is that there is a little what the economists call death elasticity. what that means is that people are able to shift when people are going to die by a few days or maybe a few weeks. we're not talking about six months, somebody who's not even sick passing away now. we're talking about a day or two shifting. if somebody was going to die on january 1st or 2nd, maybe you -- you know, they may even decide, not their relatives say, hey, you know, let's unplug them. they say, you know what, don't intubate me this one last time. and, you know, they'd rather die on the 28th. their wife or their children with the money rather than the tax man. >> what are the legalities of this. isn't that illegal? >> there are lots of do not resuscitate orders and lots of living wills that you can say to whoever your attorney is,

whoever's authorized to make these decisions for you. you can say, don't do that to me. so people do make decisions either -- i mean, in the past where estate taxes have dropped, what they've done is they've said, you know what, keep me alive until they drop and unplug me then. that's definitely happened. >> what kind of reaction are you getting from the story, john? >> i think people are more disstushtd that estate taxes could cause this to happen. they say, whoa, if this is really going to -- >> you're writing about it. i talked about end of life care this morning on msnbc about an 84-year-old. people killed me. you heartless -- >> people right now are blaming the government rather than me, which i think makes a lot of sense. i'm not setting this policy, but i do want to say this. even a little bit of will power in here. we've seen in the past that people will live -- they don't die on their birthdays, they don't die on christmas. at the millennium, the death rate at the end of 1999 dropped

and then it rose again in january 2000. why was that? apparently some people were able to will themselves into living to see the new millennium. >> you know, to be perfectly honest, if it was me and i was given the choice, i would rather do a bit of a tax benefit or a tax gift, if you like, to my relatives, i'd say pull the plug. >> i think it's really important to emphasize that we're not talking about months of cutting people off for months. we're really talking about shifting it by a few days or weeks at the most. mostly though, you know, it's very small changes. it's not that people are deciding that's it, you know, pull the plug is a little bit of a brutal way of pulling it. i think it's more let's not take some of the extraordinary measures that we might have taken otherwise if it's going to make a huge difference in the wealth we can pass onto the people we love. >> absolutely. >> john, powerful stuff. controversial. good luck this weekend. be careful walking down the street. >> i don't have the money that anybody would want to pull my

plug. >> a big plug waiving over your head. >> up next on street signs, the super fast rapid fire street talk. >> plus, our retail panel will break down for you big retailers and if all of them will be around or not this time next year. stick around. cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade.

street talk time. let's do it. two pieces of news today. 55.5 million. unfortunately that's about half of what the company paid for it. also, all things reporting rim's famous nokia. $65 million up front and then continued on. rim settled patent issues with nokia last week. barnes & noble higher despite posting holiday sales over or below expectations. it is rising because british company pearson buys a 5% stake in the nook business for $89.5 million. after this barnes & noble owns about 78.2 of the nook bis. microsoft remaining 16.8. lsi rising after they start it with a buy rating and a $9 target rate. lsi will get increasing demand for stores and networking traffic. they prefer lsi over marvell which got whacked with a huge patent. finally, they're rising after

they get a std test for chlamydia and gonorrhea. it sees the launch of the product as the key driver for the stock. this he have a $43 target. that is 9 and change above today's price or something. >> that was so fast, brian. it was almost like one of those disclaimers at the end of af pharmaceutical ad. only one full day left to trade. retailers are saying good riddance to 2012. 2013 could be a do or die time. joining us from london is stacy, president of sw retail advisors and the cnbc contributor of jay rogers nippon. stacy, i'm going to start with that. they had a real comeback. it's up 32%. is it do or die next year? >> well, sears is down 50% on a three-year basis. sorry to throw water on that, but they're in a tough position. this was basically a combination

in 2006. it was a real estate play. it was a play of put brand term fierce in k-mart. the world changed and it hasn't panned out. they're under massive pressure from walmart, home depot, lowe's. the comps have been terrible. frankly, i don't really see a turn in the business. >> it sounds like a die. are you in the same camp as stacy on sears. >> of the four companies that we're looking at, sears is the only one people expect to lose more money next year than this year. that's assuming they're around next year to lose more money than this year. so, yes, i'm in stacy's camp. i don't see any way that the sears can be worth more than the 40 bucks it's currently worth. when you look at all the real estate and you value it, you look at selling all the brands and you value them, then you subtract out the debt, you can't get above 40 bucks a share. more like 30 bucks a share would be reasonable. it would take a long time to sell the stores. it would take a long time to sell the brands. the stores are not worth as much

as they used to be. the brands are not worth as much as they used to be. home depot, lose, thwe's, they need them anymore. sears, if it goes up in the first quarter like it always does, it's a short or sell your position. i don't see any way they can have a good year. >> stacy, this time next year will radioshack be around? >> i think radioshack will continue to be in a very difficult position. their cash flow is deteriorating by the day. they are in a business where half of their business, which is mobile, is transitioning to a lower growth margin business. that is not going to change. they have told us they're going to try to cut costs, but you know what? we've heard that story in the past and it hasn't worked. it's not going to be enough. they've told us they're going to try to sell attachments. that hasn't worked and i don't expect that to change. and, finally, they're in a venture with target where they're only selling the mobile hand sets, not attachments. so there's no margin in that

business. so this cash flow story just gets worse. >> jan, what about best buy? >> stacy, best buy is one of the ones i actually like. it's going to make money this year. it's going to make money next year. of all four of these companies, it's the one that's the healthiest as far as cash flow and making money. and i think there's a good chance there could be a deal on best buy. and i also think that since they took over they're very likely to put in to a lot of these expense reductions that he's promised us. i think when they show up, yes, it may not be the greatest company. they've still got to downsize some stores. they have to move more to the web. they're still fighting with amazon. of these four players, they're the most likely to either go up because they're bought or to actually be improved next year because of new management that actually knows what it's doing. >> mandy and i are going to make some crazy, insane predictions on the show. we're going to put you on the spot as of right now.

stacy, start with you. retail predictions. could be crazy, could be insane for 2013. give us something. >> you know what, i'm going to have to -- i usually agree with jan. i'm going to have to completely disagree with him on best buy. i think we get the holiday numbers coming out on january 11th. we just saw steven gillette, who is the great hope on the internet online side who came in from starbucks, he just left and went to another company. he was just hired. so that tells you how bad holiday is. and i think potentially schultz's private equity partners take a walk on holiday numbers. and then this just gets worst for best buy. >> potentially no deal on the holiday numbers. stacy and jan, thank you very much for joining us. we're going to call you back in 12 months' time and hold your feet to the fire on these predictions. that's okay, brian. our feet are going to be on the fire. >> jan's tradition. we'll have to call him back up on monday. on deck, which markets do i think will be the best performer in the world next year? it is not here in america.

i will lay that out as part of our three big predictions for next year. and if we wait for the white house meeting to begin at the top of the hour, the markets are selling off. the dow is down 102 points as we speak. it is below 13,000. we're all having such a great year in the gulf, we've decided to put aside our rivalry. 'cause all our states are great. and now is when the gulf gets even better. the beaches and waters couldn't be more beautiful. take a boat ride or just lay in the sun. enjoy the wildlife and natural beauty.

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zwroo you can see there's some action. getting to see some traffic there. reports are we're starting to see some of the key players in the negotiations going to the white house, whether it's speaker boehner, whether it's harry reid, whether it's nancy pelosi. those are going to be the decision makers and the power players with the president. and as soon as we get somebody firm in and some headlines, you, my friends, will be the first to know. there's your players. meantime, that's how the market is being played today. the dow back below 13,000. this is shaping up to be one of the worst weeks for the market in a long time. looks like 2012 could go out like a lamb instead of a lion. all right. all week on cnbc we are focusing on outlooks and predictions for the new year. so robert frake now takes a look

at what's ahead for luxury in 2013. ♪ ♪ >> more money, more problems. the words of the late great notorious b.i.g. perfectly sum up the fortunes and fears ahead for the wealthy in 2013. >> our households will inch towards $9 million. approaching its all-time high. but wealth will come under attack from taxes and from politics. income taxes will likely go to 37 or 38% while capital gains and dividends will get that added health care tax. the occupy movement will not return with the same strength but talk of fat cats and pluto krats in the media will reduce conspicuous consumption. the rich will put less in u.s. stocks and more towards hard assets. real estate and high end collectibles. it will be funded by the overseas rich with some homes selling for more than $100

million. luxury spending will remain weak largely because of weakness in china. bright spots will be high end luxury like lbmh and experiences like travel and entertainment. wealth will become quieter. call it stealth wealth. the big spending and big luxuries will be behind closed doors and kitchens like this could become the new status symbol. now that robert has given us his pricey predictions, we would like to provide you with what we think are some promising predictions for 2013. >> all right. we're laying them out. let's take a look at what we've got, all right? to kick start the predictions, mandy. i've got a hunch that the dow will hit a record high next year. i was right on the markets this year. next year we're going to go above 14,500. one big calf fee at. if we get a big cliff deal if not all bets are off. what's your first prediction? >> my first prediction is i believe in 2013 apple is not

going to get back to its record high stock price that it hit this past september above $700 a share. the reason for it is this. we had every single apple product under my house. we have ipods, ipads. it's the same products packaged in all different sizes. i feel that they haven't got enough outside revenue streams to be able to drive them that bit further in 2013. brian. unless they come out with a tv. >> unless they come out with a tv. >> there you go. >> we'll wait and see. >> i'm on apple there. 1% household. my second prediction, best performing developed stock market in the world next year, as good as we will do here, i think, will be japan. the nikkei already up nicely this year, and i think that shinzo abbe and his huge money printing press will sink the end and send stocks soaring in japan. i know you lived in japan. your thoughts on that prediction. >> that's a big call.

the nikkei is already up about 23% so far this year. so, you know, to be the best performing developed market in 2013 on top of already 23% this year, it's a big call. >> i know. look at a 30-year chart of the nikkei. it seems to hit about 8 to 10,000, bottoms out, comes back. that level seems to also be a little bit of support. little bit. >> remember where it is right now. it is a long way below the nearly 39,000 it hit at the end of 1989. i think it's about 1/3 or something of what it used to be. anyway, this is my next prediction. i believe that microsoft will continue to lose relevance and may cease to exist in its current form in five years' time. my reason is this, brian, it's kind of fighting losing battles in too many sectors at this point. mobile, pcs, even enterprise. so i think mr. softy is definitely one to watch. >> i've got to push back. listen, you might be right on microsoft losing relevance. >> push back.

>> microsoft is a multi-hundred billion dollar company. >> ceasing to exist in its current form is what i said. >> fair enough. here's the problem. we focus on things like mobile where they're not doing well. i agree. you have the cloud and the documents and stuff like that. microsoft's revenue, mandy, has gone from $55 million -- or billion to 85 billion in seven years. its grown revenue by $35 billion. they have the sequel server business. that's a cash cow. i have to push back. >> push back on that one. we'll see. anyway, what's your last prediction? >> it's kind of in a similar space. my last prediction is a total hunch, total guess. it's not like we're not reporting on this. i'm not saying this is going to happen. i've spoken to nobody, but i believe there is a small chance oracle could make a bid for all or part of hewlett-packard. i know hp has a lot of problems and oracle wants nothing to do with printers or pcs, but like

microsoft, hp has the services and servers business. that's a cash cow. ellison is here and he loves to win. he collects companies and houses like some people collect little pet shop toys. >> and yachts and all kinds of other things as well. this is my last prediction. i feel that chinese stocks are going to really rebound. now you've got to keep in mind here that they suffered three years of losses on the shanghai from 2009 to 2011. now we're starting to watch chinese stocks break out this month. i think they're up about 12% in december. the new leadership handover is complete. you know, the feeling is that bets out of the way, they're going to get their house in order in terms of stimulating the economy again. the worst is behind them. i think maybe, just maybe, we could see the big comeback for chinese stocks next year. what do you reckon? >> i think that when you can make up any economic data point you want, your economy should do

pretty well. >> i should have a chat with the leadership. >> i'm not saying they do anything, i'm just saying if you are like matthew broderick in "war games" you go in the computer and change your grades, maybe they do that, maybe they don't. i know the average income in china, 3500 to 4,000 u.s. dollars and the average home in beijing trades at 100 times income, that makes me a little nervous. you know more about asia than i do. >> when you get those average income numbers, that's encompassing a very vast country. when you look at the house prices on the eastern seaboard, places like shanghai and beijing, it's a small sliver obviously of that. it's not really apples and apples. it's apples and oranges. i don't know how to say that in chinese. i'm sure there's a fantastic saying to say it's not apples and apples. >> apparently our predictions are happening. the dow is coming back. i'm kidding. >> we're still down. we're back above 13,000. there you go. >> comeback.

>> on the way to a record high. >> come back ten points, but it clearly is my prediction on a good dow next year. that can be the only reason. >> soak it up, baby. soak it up. >> yeah, right. >> come it up. i'm staying good-bye here. imheading off to the closing bell. up next what the fiscal cliff could mean for mom and pop retailers. >> i predict "street signs" will be back right after this. >> you're a genius. ething. ♪ the lexus december to remember sales event is on. this is the pursuit of perfection. i honestly loved smoking, and i honestly didn't think i would ever quit. [ male announcer ] along with support, chantix is proven to help people quit smoking. it reduces the urge to smoke. it put me at ease that you could smoke on the first week. [ male announcer ] some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. if you notice any of these

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a live look at the white house in washington, d.c. where we are awaiting boehner, pelosi, reid, mcconnell. all the major players to go into the white house, meet with the president, try to get a fiscal deal done. that meeting, 3:00 p.m. eastern time, in other words, in about eight minutes from now. any headline that comes out of it, you will hear first right here on the worldwide leader in business news. all right. let's forget theory for a moment and find out how the cliff may impact real businesses right here in america, so let's reconvene our "street signs" small business all-star panel. joining us president and owner of maria's italian kitchen and a new face to cnbc, david martin from h.j. martin & son in green bay who i met when i walked into

his family store this summer and got a tour of the place. david, thank you very much for joining us. madeline, first, are you worried? are you customers going to stop eating at maria's if we go over the fiscal cliff? >> i don't know, brian. i've got my parachute packed. how about you? >> pasta parachute? that's terrible, sorry. >> full of lots of lasagna noodles, but i think now that the career politicians are done with protecting their jobs, hopefully they will think about the american jobs, and just collaborate so our customers aren't talking about it, but our fellow business owners are talking about it. one of our biggest concerns is, you know, and my cohort there will probably comply, but 75% of all small businesses are individual "s" corporations so they file taxes as an individual, so that increase is going to hurt the business -- the business expenses that we

have, and then we can't put the money back into capital, so there's a lot of things. if our politicians would just get together and collaborate and kind of split the baby, if you would, you know, and think about strategic plans like we do as small businesses and not the short-term fixes. >> well said. >> capital gains is an issue and estate taxes as well as the capital expense bonus that we had. i improved a lot of my properties because of the capital expense bonus and that's going away and that's a problem. >> david, your business kind of a leading indicator, right, because companies build out flooring and they build out shelving in anticipation of expanding or remodeling, so what are you goes seeing at h.g. martin? >> in 2013 we'll have a record backlog. right now we have a lot of diversification within the company, and locally in green bay, downtown is developing. two major corporations are relocating their headquarters to downtown which we'll be involved with and lambeau field, the best stadium in the nfl, they are

adding 7,500 seats which we have dry wall, flooring and glass involvement with as well. >> david, it doesn't sound -- doesn't sound like then your family business, and it's been there since 1931, is feeling it right now. >> we're usually about one year ahead, so the uncertainty that's right now will probably affect 2014. >> okay. so the plans were made a year ago to build out, that's very interesting. madeline, your business, i've got to imagine, is a lot more immediate, right? i mean, if people's paycheck goes down 100 bucks a week, right, that's not money they are not going to put away to college, i hope. fortunately it's going to be money they are not going to spend. >> well, we're regional chains, so in california, you know, we are -- our california taxes are also 10% so if you bump us from 39% -- from 36% to 39 plus the ten it's 50% so every day you work for yourself and the next day you work to pay taxes, but you're talking about the payroll

increase, if i'm not mistaken. yes, that will be significant for a lot of people and they will think about it. we're hoping because we're a casual restaurant and our price point is right in that sweet spot, that we'll be able to capitalize. however, i think people are going to think twice about going out. they are. they are going to think about it. >> you know, david, you told me when you gave meet tour and i appreciate it had that you went through some hard times in the financial crisis after 2008. you had to lay people off, but you're bringing them back in. things are just starting to get better. >> right. >> are you back to pre-recession levels overall? >> right now we are, but with uncertainty -- with consumer spending that may affect the levels because if retailers aren't shopping at the big box stores, their capital improvements will be cut, and that will cut our project base for 2014. >> well, let's hope that does not happen. david, i know you're a big packers guy. good luck this weekend. madeline, thank you very much for coming on. we'll revisit you guys soon.

>> happy new year. >> happy new year to you both. all right. take care. all right. coming up, kate winslet's wild ride. it's something that will make you go hmm. i guarantee t. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade,

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